A nascent cellulosic ethanol industry is struggling to become costcompetitive against corn ethanol and gasoline. Millions of dollars are spent on nitrogen supplements to make up for the low nitrogen content of the cellulosic feedstock. Here we show for the first time to our knowledge that the ethanol-producing bacterium, Zymomonas mobilis, can use N 2 gas in lieu of traditional nitrogen supplements. Despite being an electron-intensive process, N 2 fixation by Z. mobilis did not divert electrons away from ethanol production, as the ethanol yield was greater than 97% of the theoretical maximum. In a defined medium, Z. mobilis produced ethanol 50% faster per cell and generated half the unwanted biomass when supplied N 2 instead of ammonium. In a cellulosic feedstock-derived medium, Z. mobilis achieved a similar cell density and a slightly higher ethanol yield when supplied N 2 instead of the industrial nitrogen supplement, corn steep liquor. We estimate that N 2 -utilizing Z. mobilis could save a cellulosic ethanol production facility more than $1 million/y.Zymomonas mobilis | nitrogenase | ethanol | cellulosic | biofuel